Supply Chain Survey “10 Years Later”

eCommerce, Standards and Supply Chain Automation

May, 2014

Background

In 2004, Industry Canada in consultation with HSCN contracted Deloitte to conduct a research study on the evolution of eCommerce in the health industry. The resulting white paper, “eCommerce in Today’s Health System: Today and Tomorrow” was published in March 2004. It helped identify the state of eCommerce readiness both by Providers (Healthcare Facility Purchasing Organizations) and )Suppliers (to those Healthcare Facilities) as well as the penetration of adoption and the value proposition.

At a strategic planning session of the HSCN Board, it was determined that a survey of the industry to determine the progress made “10 years later” would provide valuable information to the healthcare community. The survey was expanded to include standards and other forms of supply chain automation. The primary objectives of this new survey are to provide:

An updated benchmark of adoption for eCommerce & standards for all Stakeholders to learn from;

To re-assess the value proposition; and

To identify new forms of supply chain automation that could be presented as leading practices.

This work is consistent with the Strategic Direction of HSCN in three areas: to identify, develop and implement a repository of leading practices; to deliver educational resources & material; and to promote the advantages of standards.

Survey Deliverables and Approach

The intent of the survey was to determine whether the adoption of eCommerce by both Providers and Suppliers has made progress over the past 10 years and to benchmark the current use of Supply Chain standards and other forms of automation.

The first step was to establish a Task Force of experts from both the Provider and Supplier Community (Members listed below), to develop the new survey. Questions and results from the 2004 Survey were reviewed to help create a new expanded survey to include eCommerce, Standards and Supply Chain Automation. Questions and data from other industry surveys were also reviewed to ensure accuracy and completeness. Given the significant number of hospitals represented by Shared Service Organizations (SSO) across Canada, the focus of the Provider survey was directed toward the SSO community. A separate survey was created for the Supplier community, primarily those with national scope. These surveys were adapted for the SSO’s and Suppliers to help facilitate the ease of completion, use of terminology and analysis. Where possible identical questions were used to gain the perspective on a particular aspect from both Providers and Suppliers. Surveys were issued in January 2014 to all SSO’s across Canada and 63 Suppliers.

Survey results were presented by Don Cummer, Co-Chair at the HSCN 2014 Conference.

Survey Committee Members

Don Cummer, Plexxus (HSCN Sub-committee Co-Chair)

Mike Rosser, Consultant (HSCN Sub-committee Co-Chair)

Jacques Chaput, Baxter

Nils Clausen, GHX

Ann Dolan, FacilicorpNB

David Loukras, HSSBC

Herb Martin, GS1 Canada

Susan Smith, HSCN

Kathryn Knight, HSCN

Key Conclusions

Overall, the findings in this survey provide encouraging support for the further adoption of eCommerce and Global Standards. Progress has been made over the past 10 years and expanding eCommerce capabilities, such as electronic invoicing and catalogues is a strategic priority with both Providers and Suppliers. Lack of technical resources and cost to implement continue to be barriers to the adoption of eCommerce practices. Shared Service Organizations continue to research and implement other forms of Supply Chain automation to lower operating costs and provide improved services.

Summary of Results

HSCN received strong interest and support from both Providers and Suppliers. Nine out of ten provincial SSO’s were represented with a 95% response rate. Thirty-one out of 63 (49%) of Suppliers responded to the survey.

Providers and Suppliers agree on the strategic importance and adoption of GS1 Global standards.

87% of SSO’s considered the adoption of GS1 Global Standards to be a priority and 73% have either started or intend to adopt Global Standards.

Providers and Suppliers agree that the implementation of Procurement Directives has increased workload, however it has also resulted in price savings for Providers.

92% of SSO’s and 85% of Suppliers reported an increased workload caused by the adoption of procurement directives, costing more than $4.3 million annually in additional staffing costs. 83% of SSO’s reported a positive impact on internal business processes. 83% of SSO’s reported cost savings, while 63% of Suppliers reported reduced pricing attributed to procurement directives.

Providers and Suppliers agree that eCommerce continues to be a priority that drives value and adoption has steadily increased over the past 10 years.

100% of SSO’s and 96% of Suppliers report expanding e-commerce capabilities is a priority.

Providers continue to adopt other forms of supply chain automation such as: electronic requisitioning, automated PO's, use of RFID and purchasing cards.

Recommendations

The following recommendations are being made as a result of the findings from this survey:

The results of this survey should be shared and discussed with others to promote the value of eCommerce and Global Standards.

Both Providers and Suppliers are encouraged to keep the implementation of Global Standards a strategic priority.

Providers should share their experience and results implementing other forms of automation and leading practices with others.

Suppliers are encouraged to label products in accordance with Global Standards and work closely with Providers to create applications for RFID and bar code labeling.

Providers and Suppliers are invited to engage the services of HSCN to help promote and educate end users the value of eCommerce, Global Standards and other supply chain management leading practices.